Galliford Try (GFRD ) trading update for 1H21 reveals a return to profitability and a resumption of its dividend post a strong first half result to 31 December 2020.

The UK construction group performed well from 1 July 2020 to 31 December 2020 and said that it now expects trading for the period to be in line with the Board's expectations.

The company explained that all of its projects have been fully operational since the start of the FY21 financial year on 1 July 2020 and, in line with the latest Government and industry guidelines, continues to trade ‘at normal levels’ throughout the current restrictions. 

The group also maintained a strong cash position in 1H21 - average month-end cash for the six months ended 31 December 2020 was £158m (1H20: £141m). At its period-end, Galliford Try had no debt, while cash as at 31 December 2020 stood at £209m (30 June 2020: £197m).

Galliford said this will leave it ‘well placed to manage lockdowns and to continue to support the business’. As at 31 December 2020, the company had a high-quality order book of £3.3bn (1H20: £3.2bn), benefitting from recent contract awards which it said aligns to its strategic focus.

Galliford cited notable awards received during the period including Thames Water's £590m AMP 7 framework, its appointment to the £10.5bn NHS Shared Business Services framework as well as its appointment to the £2.1bn Construction West Midlands framework.

Commenting on its trading performance, Bill Hocking, Chief Executive, commented, "The health, safety and wellbeing of our colleagues is of paramount importance, especially during the current lockdown. Our staff and supply chain's response to the challenges faced in 2020 was exemplary and I am pleased with the trading performance that we have delivered.

Despite the ongoing challenges from Covid-19, our strong balance sheet, market leading sector positions and high-quality order book give me confidence in our future performance."

FY21 Outlook

The group continues to see a strong pipeline of opportunities in its core sectors in line with its approach to risk management and contract selection.

‘Our strong position in the public and regulated sectors positions the Group well to benefit from increasing Government construction and infrastructure spending,’ it told investors.

The construction sector was one of the worst hit by the pandemic, so investors will be particularly pleased by these results and return to the dividend list. Furthermore, the multi-year contracts announced during 1H21 and management’s risk-based approach to new business provides significant confidence in market expectations for FY21 and beyond. Shares in Galliford Try have increased by over 85% in value since the beginning of November 2020 to open 0.20% higher this morning at 130.26p following the announcement.

Reasons to Follow GFRD

Galliford Try is a leading UK construction group listed on the London Stock Exchange.  

Operating as Galliford Try and Morrison Construction, the group carries out building and infrastructure projects with clients in the public, private and regulated sectors in the UK. 

Strategy for Sustainable and Profitable Growth 

The Group is well capitalised with no debt, no pension liability, a portfolio of high-quality PPP assets, a strong order book and is expecting to be profitable this year and reinstating its Dividend at the Half Year stage. 

Risk Management at Its Core 

Galliford Try is laser focused on robust risk management and concentrating on growth sectors where the Company has a highly differentiated offering with a high value proposition for its clients. 

High Visibility on Future Earnings 

Galliford Try has signed a number of high-value longstanding contracts with exposure to long-term Government funded Infrastructure projects as part of its economic recovery plan. 

The leading UK construction platform, combined with the Company’s strong client relationships, provides the Board with confidence in the future performance of the business. 

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